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Tower Semiconductor Raises Forecasts on AI and Data Center Demand Surge

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Tower Semiconductor, the Israeli-based contract chipmaker, forecast fourth-quarter revenue above market expectations, driven by booming demand for chips used in data centers and AI infrastructure. The announcement sent the company’s U.S.-listed shares up 15%, reaching their highest level in over two decades after a 63% surge this year.

The company said it expects revenue of around $440 million, plus or minus 5%, surpassing analysts’ estimates of $434.4 million, according to LSEG data.

CEO Russell Ellwanger attributed the growth to strong demand for Tower’s analog and mixed-signal semiconductors, which are widely used in automotive, industrial, and communications technologies. He added that the company’s Silicon-Germanium and Silicon Photonics technologies — essential for high-speed optical data transmission — are key growth drivers as global data center expansion accelerates.

Tower also announced an additional $300 million investment to expand its manufacturing capacity and advance next-generation chip capabilities across Israel, the United States, Italy, and Japan.

For the third quarter ended September 30, Tower reported revenue of $395.7 million, slightly above forecasts, and adjusted earnings of 55 cents per share, topping estimates of 54 cents.

The results highlight the semiconductor industry’s ongoing shift toward AI-driven infrastructure, where specialized chips for data transmission and network performance are becoming vital to global tech ecosystems.

Tower Semiconductor Forecasts Q2 Revenue Above Estimates on Wireless Chip Demand

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Tower Semiconductor (TSEM), the Israel-based contract chipmaker, forecast second-quarter revenue slightly above Wall Street expectations on Wednesday, buoyed by steady demand for wireless communication and power management chips.

The company, which specializes in analog and mixed-signal semiconductors, is seeing record growth in radio frequency (RF) infrastructure technologies, driven by expanding wireless and sensing applications—even as demand in automotive and industrial sectors remains uneven.

Key Forecast and Financial Highlights:

  • Q2 Revenue Guidance: $372 million (±5%), above analyst estimates of $371.3 million (LSEG)

  • Q1 Revenue: $358.2 million, in line with forecasts

  • Q1 Adjusted EPS: 45 cents, beating estimates of 38 cents

Growth Drivers

  • Strong demand for RF infrastructure chips used in wireless communication is a standout contributor to revenue.

  • Despite choppy conditions in the automotive and EV sectors, Tower is finding support in consumer electronics and industrial applications.

The company is also expanding production capacity at its Agrate, Italy facility, a move that increases short-term costs but is expected to bolster long-term output and growth potential.

Tower reaffirmed its full-year outlook for sequential revenue growth across quarters, signaling confidence in its product pipeline and end-market stability.

Market Reaction

Despite the strong performance and upbeat forecast, Tower’s U.S.-listed shares slipped about 1% in premarket trading, possibly due to broader market sentiment or cost concerns related to facility expansion.

Tower’s continued focus on analog and RF chip technologies—especially amid global interest in connectivity and power efficiency—positions it as a resilient player in a diversifying semiconductor landscape.

Tower Semiconductor Predicts Strong Q1 Revenue Amid Robust Auto Sector Demand

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Tower Semiconductor (TSEM.TA), an Israeli contract chipmaker, has forecasted slightly higher-than-expected first-quarter 2025 revenue, driven by steady demand for its chips, particularly from the automobile sector. The company’s U.S.-listed shares rose by 1% in premarket trading following the announcement.

Tower specializes in manufacturing analog and mixed-signal semiconductors, which are primarily used in the automobile industry by “fabless” firms that design chips but outsource their production. Despite challenges within the automobile sector, such as difficulties in clearing excess inventory built up during the pandemic and a recent slowdown in demand for electric vehicles, Tower Semiconductor has remained resilient, continuing to supply its chips.

The company is now forecasting first-quarter revenue of $358 million, with a 5% margin of variability. This projection slightly exceeds analysts’ expectations of $357.5 million, according to LSEG data. For the fourth quarter, Tower reported revenue of $387.2 million, meeting analyst forecasts. However, its net profit for the quarter ending December 31 came in at $55.1 million, below the expected $58.7 million, mainly due to increased costs from its new greenfield chipmaking facility in Agrate, Italy.

On an adjusted basis, the company posted quarterly profit of 59 cents per share, surpassing analyst estimates of 52 cents per share.